Castellaniella (ex Alcaligenes) defragrans strain 65Phen mineralizes monoterpenes in the absence of oxygen. Soluble cell extracts anaerobically catalyzed the isomerization of geraniol to linalool and the dehydration of linalool to myrcene. The linalool dehydratase was present in cells grown on monoterpenes, but not if grown on acetate. We purified the novel enzyme ∼1800-fold to complete homogeneity. The native enzyme had a molecular mass of 160 kDa. Denaturing gel electrophoresis revealed one single protein band with a molecular mass of 40 kDa, which indicated a homotetramer as native conformation. The aerobically purified enzyme was anaerobically activated in the presence of 2 mm DTT. The linalool dehydratase catalyzed in vitro two reactions in both directions depending on the thermodynamic driving forces: a water secession from the tertiary alcohol linalool to the corresponding acyclic monoterpene myrcene and an isomerization of the primary allylalcohol geraniol in its stereoisomer linalool. The specific activities (V(max)) were 140 nanokatals mg(-1) for the linalool dehydratase and 410 nanokatals mg(-1) for the geraniol isomerase, with apparent K(m) values of 750 μm and 500 μm, respectively. The corresponding open reading frame was identified and revealed a precursor protein with a signal peptide for a periplasmatic location. The amino acid sequence did not affiliate with any described enzymes. We suggest naming the enzyme linalool dehydratase-isomerase according to its bifunctionality and placing it as a member of a new protein family within the hydrolyases (EC 4.2.1.X).